Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department. Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Application of the "At Risk" Rules to Joint Ventures
and Co-Ownerships
Question 45
As a result of the decision in the Ward case, at least one commentator has wondered whether Revenue Canada will apply the "at-risk" principles outlined in subsection 96(2.2) through to (2.7) in respect of joint ventures and co-ownerships even in circumstances where the parties expressly disclaim a "partnership". What is Revenue Canada's position with respect to the "at-risk" rules applying in circumstances of co-ownership agreements, joint ventures and other non-partnership business arrangements?
Answer 45
The fact that the parties to a particular arrangement expressly disclaim a partnership does not, by itself, preclude the arrangement from being a partnership. If a particular arrangement is a partnership, the "at risk" principles outlined in subsections 96(2.2) through to 96(2.7) of the Income Tax Act will apply. If it is clear from all the facts that such an arrangement is not a partnership, the aforementioned subsections of the Income Tax Act will not apply. The Department's general views as to what constitutes a "partnership" are set out in Interpretation Bulletin IT-90 , dated February 9, 1973. As stated in paragraph 2 of the bulletin, for guidance on whether a particular arrangement at a particular time constitutes a partnership, reference should be made to the relevant provincial law on the subject, and such law will be viewed as persuasive by the Department.
Michel Lambert New question no. 11 Canadian Tax Foundation November 25, 1992 922863
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